Wonkbook: FinReg doesn't have the votes; Kagan's uneventful first day

With Scott Brown, Russ Feingold, Olympia Snowe, and Susan Collins all on the fence, and Robert Byrd's vote lost, FinReg's final passage is in doubt. And that's not the only bad news for a major Obama priority: Lindsey Graham has announced he'll skip today's White House meeting on climate and energy legislation.

Meanwhile, Elena Kagan's first confirmation hearing was largely uneventful. Kagan proved herself capable of sitting still and looking interested for long periods of time, which is understood to be a key qualification for a Justice. And Obama is still meeting with activists and Congressmen on immigration, despite signs he believes reform to be dead this Congress.

It's Tuesday. Welcome to Wonkbook.

Top Stories

FinReg doesn't have Robert Byrd's or Russ Feingold's votes, and Susan Collins, Olympia Snowe, Scott Brown, and even Evan Bayh are now on the fence, report Victoria McGrane and Corey Boles: "'You have to look at the entirety of the legislation,' [Snowe] said. 'Obviously, it's important to have financial regulatory reform.' Sen. Scott Brown (R., Mass.), who voted yes when the Senate passed its bill in May, reiterated his reservations about the final product because of the fee. 'I've said repeatedly that I cannot support any bill that raises taxes.' Sen. Susan Collins of Maine, calling herself undecided, said there was 'much in this bill to like' but like Mr. Brown, she voiced concern about the fee 'slipped in during the late hours.'"

Remember: Conference reports can be filibustered, but they can't be amended. Short of going back to conference and coming out with a new report, the legislation can't, at this point, be tweaked and changed to pick up the final votes.

Elena Kagan's confirmation hearing was uneventful, but suggested at least some bipartisan support, report Alec MacGillis and Amy Goldstein: "Kagan got a warmer review from one Republican: Scott Brown, the new senator from Massachusetts, who introduced her to the committee alongside Sen. John F. Kerry (D-Mass.). Kagan, Brown said, is 'undoubtedly a brilliant woman who has served her country in a variety of capacities.'" Also, Orrin Hatch: "I've never considered the lack of judicial experience to be an automatic disqualifier for a judicial nominee."

Thomas Goldstein predicts that 63 or 64 Senators will back Kagan, and that she'll move the court to the right, reports J. Taylor Rushing: "'It's like losing a committee chair, or something like that. You step back in that way,' Goldstein said. 'So just by way of who's leaving rather than who's coming in, the court gets a little bit more conservative.'"

Still to come: A storm endangers the oil siphoning process; Ireland shows the danger of austerity economics; Obama met with immigration activists; and what Germans consider "American food".

Economy/ FinReg

Europe's recovery is floundering, reports Nicholas Winning: "Released Monday, the Conference Board's Leading Economic Index for the euro zone dropped 0.5% to 109.7 in May, the first fall for 14 months. The index is an amalgam of eight indicators of activity and is designed to predict future activity."

Jared Bernstein, Joe Biden's chief economist, argues that deficit reduction and job creation need not be opposed: "As economist Brad DeLong recently noted, at times like this 'there is no crowding out of private investment; on the contrary, there is likely to be crowding in'. We saw just this in our 2009 Recovery Act, which is using matching grants and tax credits to encourage private investors to come off the sidelines and finance the expansion of new industries - and new jobs - most often associated with clean energy. The existence of all this excess capacity keeps interest rates and inflation low, so monetary policy is not compelled to mop up any overflow."

The Bank for International Settlements wants higher interest rates, reports Brian Blackstone: "The Bank for International Settlements issued a stern warning to central banks - keeping rates low for too long, and other actions like buying government bonds, creates risks to financial stability and opens central banks up to political pressure. The warning, contained in BIS's annual report, comes as Europe's debt crisis has pushed rate-increase forecasts for major central banks including the Federal Reserve, Bank of England and European Central Bank off until well into 2011."

Ireland's experience shows the cost of austerity policy, reports Liz Alderman: "Rather than being rewarded for its actions, though, Ireland is being penalized. Its downturn has certainly been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish economy shrank 7.1 percent last year and remains in recession. Joblessness in this country of 4.5 million is above 13 percent, and the ranks of the long-term unemployed - those out of work for a year or more - have more than doubled, to 5.3 percent. Now, the Irish are being warned of more pain to come."

Community banker Sarah Wallace explains her opposition to FinReg: "We all know the employees needed to provide banking services to deposit and loan customers: the manager, the teller, the back-office folks who balance the books, the loan officers and the customer-service representatives. In order to comply with the volumes of new regulation-and small banks are required to comply with the same consumer regulations that apply to the Wall Street banks-we will need to have a proportionately higher number of employees working day after day to interpret and implement all the new federal rules."

Gerald Seib thinks Greece has changed America's deficit politics: "Average Americans certainly don't spend a lot of time worrying about Greece's bond rating, or the status of sovereign debt in the Euro zone. But they can sense fear in the air, and this spring brought a whiff of fear that a nascent recovery might be cut short because of international economic woes. It seems likely we're now seeing the direct and logical reaction to that change in psychology."

The GOP is not responding favorably to cap and trade overtures, reports Darren Samuelsohn: "Sen. John McCain (R-Ariz.), under pressure back home from a conservative primary challenger, hasn't come anywhere close to the climate issue that was once a key component of his 'maverick' credentials.--'I'm saying, people who cast about cap and trade and carbon pricing, they may mean well, but I'm not sure they know what they're talking about,' Lugar told POLITICO. 'And before we get down that step, we really need to know more.'"

BP's business model depended on aggressive energy market trading, reports Nelson Schwartz: "The trader's attempt to corner the propane market resulted in the largest fine for market manipulation in the history of the Commodity Futures Trading Commission, a federal regulator, in 2007. BP, however, remained committed to the aggressive trading that brought in billions annually - as much as a fifth of the company's total profits - according to interviews with experts, government officials and other traders."

David Roberts explains why Democratic proposals on climate change cost less: "Republican plans to lavish the industries and technologies they favor with subsidies -- which is called 'picking winners' when Democrats do it -- are new spending that's not paid for. They are, by definition, 'more expensive' than alternatives that are paid for. This is a key aspect of the climate debate on which the mainstream media has utterly dropped the ball: Democratic plans on climate and energy are not only more environmentally credible, they are more fiscally credible. Republican plans would achieve less at greater total cost to federal coffers."

The Supreme Court will consider an earlier immigration law in Arizona, reports Jerry Markon: "With the Justice Department preparing a lawsuit against Arizona over the new law, the court's decision to review the earlier measure -- the Legal Arizona Workers Act -- signals a willingness to get involved in one of the nation's most politically divisive issues. The Obama administration had urged the court to review and set aside the Legal Arizona Workers Act, saying federal immigration law should preempt state efforts."

Obama's schedule suggests immigration is still on the agenda, reports Scott Wong: "The president sat down with a handful of community activists and labor leaders Monday afternoon for a meeting that was put on his schedule at the last minute. And he'll host members of the Congressional Hispanic Caucus for an hourlong meeting set to begin at 3:40 p.m. Tuesday, Capitol Hill and White House aides said."

FedEx and UPS are in pitched battle over a proposed labor regulation, reports Chris Frates: "Memphis-based FedEx has spent millions of dollars, and its chief executive has even threatened to cancel an order of new Boeing planes if the proposal passes. UPS has been quieter about its lobbying but is getting support from the Teamsters, who represent many of its employees. The 230-word provision making it easier to unionize FedEx is part of the House Federal Aviation Administration reauthorization legislation but is absent from the Senate version. And the difference has become a major sticking point in finishing the bill before the current law expires Saturday."

Noah Feldman argues Kagan's appointment marks the end of the WASPs' reign: "Together, these social beliefs in equality undercut the impulse toward exclusive privilege that every successful group indulges on occasion. A handful of exceptions for admission to societies, clubs and colleges - trivial in and of themselves - helped break down barriers more broadly. This was not just a case of an elite looking outside itself for rejuvenation: the inclusiveness of the last 50 years has been the product of sincerely held ideals put into action."

Closing credits: Wonkbook compiled with the help of Dylan Matthews and Mike Shepard.